- Posted by Don Robinson
- On December 12, 2017
- 0 Comments
- corporate cultures, Leadership, Mergers and Acquisitions
When two companies merge, the primary focus is usually on how quickly the organization can blend and optimize operations and take advantage of sales and marketing synergies. And that’s great. But there’s another issue that requires just as much attention: Corporate Culture.
When companies are merging, differences in corporate culture become immediately evident. Those differences often create the fuel for skeptical conversations, misunderstandings, outright conflict, or even merger failure. According to the Society for Human Resource Management, 30% of all mergers fail because of culture incompatibility that goes unaddressed. Here is our view of a few things to focus on when company cultures merge.
The vast majority of corporate cultures are not right or wrong; they simply “are.” And just like the differences in cultural practices between countries — like whether eating insects is culturally acceptable or even encouraged — some people may be quick to pass judgment on the practice as perfectly acceptable…..or outright wrong.
The fact of the matter is that cultures are and often should be different — and what may feel wrong to one culture is perfectly acceptable in another. The same is true with companies, and passing judgment without taking the time to understand why a particular practice or culture exists can lead to major misunderstandings – and resentment.
Abandon the idea of cultural uniformity.
A second point about corproate cultures after a merger or acquisition is leadership’s intuition to build a 100% common corporate culture. Huge amounts of energy are often expended to standardize practices and behaviors across the newly-merged organization.
Unfortunately, attempts to create a single uniform culture are most often a fool’s errand. Common corporate cultures usually don’t exist even within a single company, much less a merged company. The culture within the sales group is typically different than the culture found in research and development. Often these cultural differences are actually necessary for the organizations to be successful.
That’s why trying to standardize cultures among merging companies is impossible. So what should you do? Focus instead on securing agreement on a handful of the most critical core values and the behaviors that support those values. Then share those expectations adamately across the company.
In short, focus on what really matters.
Stick to observable behaviors and concrete levers.
Never forget that cultures – the beliefs held by individuals within organizations – are invisible. That makes it hard to operate on or change culture directly. What you can operate on, however, are observable behaviors. How? Focus on the concrete “levers” that drive observable behaviors — things like policies, rewards, recognition, pay, the physical layout of space and how communications flow within the company. The integration process should address changes to these areas so that the identified values are supported.
For example, if you want a corporate culture to value safety, then structure safety rewards, reinforce safety in meetings and communications, and ensure you take steps to put safety at the forefront of your investment decisions.
And never forget that blending cultures takes time. So stay patient with culture differences and participate constructively – without judgement — to explore which critical parts of the corporate culture need to be aligned.
In the end, how quickly cultural integration occurs depends on the personal decisions made by the hundreds of employees who have to choose to align their everyday behaviors in support of the stated values. So ask yourself if your behaviors demonstrate you are choosing to embrace the culture you are trying to build as a combined company — because change, and culture, ultimately starts with you.